LT financial liabilities

Initial measurement of LT financial liabilities

1. FVPL, if meets 3 held for trading criteria (held for profit, evidence of profit, derivative) or is designated irrevocably

2. Amortized cost

Initial measurement of bonds at amortized cost vs FVPL

Present value of FCF less transaction costs attributable to issuance (net)

Dr. Cash / Cr. Bond payable

If issues between coupon dates, pay seller for interest accrued from last date of issue

If FVPL - measure at fair value and expense issuance costs

Subsequent measurement of bonds at amortized cost

= PV - principal ± adjustments for amortization of discount (+) or premium (-)

Effective interest method for premium/discount amortization, when CV changes calculate a new effective rate

ASPE allow choice of SL instead of effective interest rate for premiums and discounts

Subsequent measurement of bonds at FVPL

Remeasured at FV at end of each period, change in FV goes to profit and loss as unrealized

Adjust excel items when calculating the comparable FV amount

Initial measurement of LT non-cash asset

Initially recognize at FV of asset given up less directly attributable costs

Dr. Asset / Cr/ N/P